Biden Admin Restores Rule Requiring Fair Pay for 'Gig' And Freelance Workers

U.S. Dept. of Labor rule will help full-time workers who are classified as "independent contractors" obtain parity with company employees, including overtime and benefits.

Photo by Erik Mclean on Unsplash

One percent of Americans own more wealth than the nation’s entire middle class.

One reason for this stunning inequity is that tens of millions of American workers are being cheated out of fair wages.

These workers include people who perform the equivalent of full-time work as freelancers or service workers for so-called “gig” employers like Airbnb, DoorDash, Instacart, TaskRabbit and Uber. They are classified as independent contractors and grouped with people who work a few hours a week to supplement income from a regular job or to bolster a Social Security check.

According to McKinsey & Company, 36 percent of employees—equivalent to 58 million Americans —identified as independent workers in 2022. That’s up from 27 percent in 2016.

The U.S. Dept. of Labor Tuesday rescinded a 2021 Trump-era rule that made it easier for employers to classify workers as “exempt” from the requirements of the Fair Labor and Standards Act of 1938. The FLSA requires employers to pay employees at least the federal minimum wage of $7.25 per hour and overtime pay for ever hour worked over 40 in a workweek.

Trump’s pro-employer rule was based on the “nature and degree of the worker’s control over the work” and “the worker’s opportunity for profit or loss.” But isn’t work, work?

The Trump administration never explained why workers should be penalized because they set their own hours or work from home.

The DOL’s new rule aligns with judicial precedent dating back more than 50 years that focuses on six factors to determine whether a worker is an employee or an independent contractor. These factors are: